Insurance of Trust Funds Law and Legal Definition
According to 12 USCS § 1817(i), [Title 12. Banks and Banking; Chapter 16. Federal Deposit Insurance Corporation] the term insurance of Trust Funds means:
“(1) In general. Trust funds held on deposit by an insured depository institution in a fiduciary capacity as trustee pursuant to any irrevocable trust established pursuant to any statute or written trust agreement shall be insured in an amount not to exceed the standard maximum deposit insurance amount (as determined under section 11(a)(1) [12 USCS § 1821(a)(1)]) for each trust estate.
(2) Interbank deposits. Trust funds described in paragraph (1) which are deposited by the fiduciary depository institution in another insured depository institution shall be similarly insured to the fiduciary depository institution according to the trust estates represented.
(3) Bank deposit financial assistance program. Notwithstanding paragraph (1), funds deposited by an insured depository institution pursuant to the Bank Deposit Financial Assistance Program of the Department of Energy shall be separately insured in an amount not to exceed the standard maximum deposit insurance amount (as determined under section 11(a)(1) [12 USCS § 1821(a)(1)]) for each insured depository institution depositing such funds.
(4) Regulations. The Board of Directors may prescribe such regulations as may be necessary to clarify the insurance coverage under this subsection and to prescribe the manner of reporting and depositing such trust funds.”
